US Stock Market Edges Higher Following Record Hights, Oil Prices Slip

US Stock Futures Rise Amid Hopes of Middle East Conflict Resolution

US stock futures traded with modest gains on Thursday, 7 May, after headline indices touched fresh record highs amid hopes that the US and Iran are moving closer to an agreement to end the two-month-long conflict in the Middle East. Futures tied to the S&P 500 rose 0.1%, while those linked to the Nasdaq Composite and Dow Jones Industrial Average also traded with similar gains.

The rally in US equities was fueled by investor sentiment buoyed by expectations of easing tensions in the Middle East and better-than-expected performances from major technology companies. The latest media reports suggested that Iran was reviewing the latest American proposals aimed at ending the conflict. The reports indicated that the US had sent a one-page memorandum of understanding through Pakistani intermediaries to formally end the conflict and pave the way for the gradual reopening of the Strait of Hormuz.

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Investors are now awaiting the US non-farm payrolls report due on Friday. Economists surveyed by Reuters expect the US economy to have added 62,000 jobs in April after payrolls rebounded by 178,000 in March.

Crude oil prices continued to drift lower for the third straight trading session, with benchmark US crude falling another $4.8 to around $90 a barrel after dropping $7 in the previous session. Brent crude, the international benchmark, declined $4.5 to an intraday low of $96.77 a barrel, extending losses that erased the sharp gains recorded earlier this week.

However, Brent crude still remains well above the roughly $70-per-barrel level seen before the conflict with Iran began. Falling oil prices are easing inflation concerns and reviving hopes that the Federal Reserve could eventually pivot back toward rate cuts later this year, according to Vested Finance. Fortinet surged nearly 15% in premarket trading after forecasting earnings above expectations, while DoorDash rallied on strong guidance, signalling resilient consumer demand despite macroeconomic uncertainty.

However, not every technology company participated in the rally. Arm Holdings fell after warning about weakness in the smartphone market, showing that investors are becoming more selective about which AI and semiconductor stories they want to own, according to Vested Finance.

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